The Lorain City Schools Board of Education reviewed the district’s updated five-year financial forecast during a special meeting, revealing that the district may enter a deficit as early as fiscal year 2028 if existing tax levies are not renewed.
According to the presentation, Lorain City Schools is currently operating with a positive cash balance but is deficit spending in the general fund for the current fiscal year—meaning that expenses are exceeding revenues. The district began fiscal year 2025 with a projected cash balance of approximately $22 million. However, projections show that this balance will decline over time without intervention.
If current levies are renewed, the district is expected to run out of cash by fiscal year 2029. If the levies are not renewed, the district could see a negative balance by fiscal year 2028.
The forecast also outlined several contributing factors to the current financial outlook, including:
- A reduction of nearly 30 positions through attrition
- Approximately 50 retirements among certified staff
- Lower health insurance costs due to a new consultant and changes in the plan
- Decreased spending on purchased services and supplies
The financial forecast is influenced by the state budget process, which is updated every two years. At the time of the meeting, the district had factored in the funding levels from the House’s version of the state budget for fiscal years 2026 and 2027. Funding levels for fiscal years 2028 and 2029 were assumed to remain at the fiscal year 2027 level, with reductions in guarantee funding.
The treasurer also presented four potential scenarios to illustrate how different outcomes in state funding could affect the district’s financial position:
- House Budget with Guarantee Reductions (Current Forecast): Ends with a projected balance of $13 million in FY29
- Fair School Funding Plan with Full Phase-In: Ends with a projected balance of approximately $3 million in FY29
- House Budget with No Guarantee Reductions: Ends with a projected balance of around $6 million in FY29
- Governor’s Budget Proposal: Projects a deficit of nearly $14 million by FY29
The district is no longer under fiscal precaution status with the Ohio Department of Education and Workforce, a designation that was lifted due to revised spending plans and improved short-term financial projections.
Future financial updates are expected in July, following the adoption of the state’s final budget. Another update will be presented in November as part of the district’s ongoing financial monitoring.
The board was reminded that the forecast is a projection based on current conditions and subject to change as state funding levels, strategic plans, and operational costs evolve. No board action was taken following the presentation.
The district noted that community engagement and financial planning will be key as it evaluates options related to levy renewals and long-term sustainability.